In recent years, China’s healthcare sector has been received increasing scrutiny from the Chinese government. Extensive corruption investigations have made their way into the medical industry.
The Chinese government has begun investigations on a number of top Chinese healthcare officials. The Central Commission for Discipline Inspection recently initiated a corruption investigation on Tong Min, the director of the China Food and Drug Administration Department of Medical Device Supervision. Tong attained his current position in late 2013 and has since had an important role in regulating medical device manufacturing and distribution. Wang Yu, the former director of the department of medical administration within the National Health and Family Planning Commission is also being investigated for accounts of bribery. In his former director position, Wang supervised medical device and drug trials and was also involved in implementing healthcare policies.
In addition to investigating Chinese healthcare officials, Chinese prosecutors have focused on the business practices of foreign medical companies. The probes began last year when the Chinese government started preliminary investigations on foreign medical device companies suspected to be involved in bribery and other illegal strategies. Global multinational corporations such as GlaxoSmithKline and Johnson & Johnson have already been fined on charges of bribery and price fixing. These investigations reflect the efforts of President Xi Jinping’s administration to suppress corruption in China, and may also be indicative of the government’s efforts to support domestic production of medical products.
The anti-corruption campaign, in addition to the Chinese government’s efforts to promote economic nationalism, is increasing the pressure felt by foreign companies doing business in China where corruption is rampant. Foreign medical device firms are trying to capture growth opportunity in China amidst the regulatory scrutiny by building more local manufacturing presence and working more closely with local Chinese firms.